All Forum Posts by: Drew Farnese

First I'd like to say how much of a help everyone on here has been. Thanks everyone!

Anyway, I have learned through you guys that a good method to find a deal is by compiling a list of properties in my niche and area that I would be interested in and directly mailing them asking them to sell. All the properties I selected are NON owner occupied, 2-4 units, <90% mortgage paid off.

I got a list together, and I'm a little stuck as to how to write a message. Should I ease into it? Try to be convincing? Just flat out ask if they will sell?

Should the message be printed as a post card or as a letter in an envelope?

What has worked for some of you?

Not to thread jack here, but I saw a property before that had a UST that was not in use. I was curious if that would have had to be removed upon the sale of the house? Does it depend on state? I never looked into it because the property wasn't a good investment anyway.

@Bryce Y. You are probably right. I don't really NEED to get out of renting, it just seemed silly to me to give my money to someone else rather then building equity in my own property. However, you guys are making me realize that if a personal residence raises my current expenses its probably not a good idea at this time.

@Aaron McManus This is also a good idea. I have been utilizing biggerpockets and some local REIA meetings to try to network. I have not found any local lender/investors via BP yet, and I must admit my first REI meeting I did much more listening then talking.

The group meets once a month and I plan to try to talk to more people there next time.

I need to get better at searching for deals, because as of yet I haven't found ANYTHING worth getting excited about.

@Simon Campbell @Alissa S. Thanks guys! I guess I really wasn't looking at it that way. I was looking at it as if I'm renting - I'm throwing money away. I fully understand what your saying though. Thanks so much for your opinions.

I guess buyer financing would be the best route of attack if I were to take this path. 10K won't go very far if we start talking about 10-20% down on a property. How have you found some buyer financing deals Alissa?

Yes it is possible to find a house with a walk out basement that could be rented, just have to keep my eyes and ears open I guess.

Out of hundreds of listings I have only found ONE property (single family house, foreclosure) that has potential to cash flow. I even try to get creative with potential garage rentals for additional income at some of the properties but still can't get the numbers to look right.

The prices I have seen for duplexes seem to be around 190K-200K. The going rent is around $1200 for a 3br, $1000 for a 2br. So assuming I found one with two 3br units (after I left one unit), it would bring $2400/month.

Borrowing around 180K would bring PITI and PMI to around $1600 (taxes are around $6000 in the area). So using the 50% rule it would net -$400/mo.

I think I have to start talking to people and find someone selling that isn't on the MLS.

I know its a question that I'll probably get 10 responses with 10 different answers, but I'm going to try. You guys have a lot more knowledge then me.

I'll try to give enough info while keeping this as short as possible, as I know you guys have more important things to do then answer my questions!

When I came here I thought I had a pretty solid plan to buy a duplex and rent half and live in half, but the more I read the more I question my path.

SO, heres the quick back story. I am 23 and currently live with my girlfriend and 2 year old daughter in an apt ($800 rent). I have a pretty awesome job and make more then the median income in my area (not comfortable disclosing income info on here). I only have about 10K saved, and increasing at a rate of $1300/month.

Obviously I need to get out of renting ASAP. As I see it my options are :

-Buy a nice single family house and start building equity (this would tie up a large portion of my income)

-Buy a not so nice single family house (that has the potential to cash flow) that I can rent in a year or 2 after buying a nicer home for myself ( this would eliminate my chance for cash flow potential until my next purchase)

-Buy a 2, 3, or 4 plex. This sounds great, but my area doesn't have many 3 or 4 unit properties, and when they pop up they wont cash flow. (Don't want to go to a bad school district in case we end up staying there longer then expected).

-Stay where I am and start buying cheap properties in low income areas and start building cash flow and once its possible buy my own property (seems silly to keep tossing away $800/month)

I am fully open to opinions and ideas. I have been reading and networking SO much, and I don't want to get stuck in "analysis paralysis" as the title hints.

Thanks so much for your time!

Thanks for the responses guys. I'm going to expand on the areas I was looking in!

Hey guys,

I'm currently searching for a multi-family as my first purchase. I plan to live in one of the units and rent out the remaining units. This would effectively lower my expenses from my current situation and allow me to start saving for more investments (and a primary residence for myself).

At the beginning of this week I had an offer in on a duplex that I really liked. When my offer wasn't accepted I came here for help. Good thing I did - you guys talked me off the ledge, because it would have had a negative cash flow. Thanks guys :) The 50% rule was an eye opener.

ANYWAY, my search has continued and every property I find works out to be a negative cash flow for me. They would all be negative even IF I had 20% to put down.

What is the best way to find properties that WILL have a positive cash flow?